Maine’s New Paid Family and Medical Leave

What You Need to Know About Maine’s New Paid Family and Medical Leave Deduction

Starting January 1, 2025, Maine businesses and employees will notice a new deduction on their paychecks related to the Paid Family and Medical Leave (PFML) program. This initiative, set to provide up to 12 weeks of paid leave starting in 2026, is an important development for workers and employers alike. Here’s what you need to know:

What Is PFML?

The Maine PFML program was created to support workers during significant life events, such as medical issues, family care needs, and safe leave following abuse or violence. Contributions begin in 2025, but benefits won’t be available until May 2026. This early start ensures the fund has sufficient resources when claims open.

How Does It Work?

• Who Pays? Both employees and employers contribute. Employers with 15+ employees will pay 1% of wages, splitting the cost with employees (up to 0.5% from each). Smaller businesses (fewer than 15 employees) contribute 0.5% of wages, which can be entirely employee-paid.
• Reporting and Contributions: Employers are responsible for remitting contributions through the Maine Paid Leave Portal, launching in early 2025. Quarterly wage reports and contributions are due at the end of each quarter.

Key Details for Employers:

• Size Matters: Employers with 15 or more employees will pay the higher contribution rate.
• Self-Employed Options: Self-employed individuals can opt into the program by paying 0.5% of their income.
• Payroll Reporting: Employee contributions will appear in Box 14 of the W-2 form under “MEPFML.”

What Should Employers Do Now?

1. Prepare for Payroll Adjustments: Review your systems to implement these deductions starting January 2025.
2. Educate Your Team: Share details with employees so they understand the purpose of the deduction.
3. Register with the Portal: Once available, register your business to stay compliant with reporting and payment requirements.

Why This Matters:

This program is a step forward in supporting Maine workers during challenging times, but it’s crucial for businesses to prepare for the financial and administrative changes. Staying informed will ensure a smooth transition.

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If you have questions about how this impacts your business, feel free to reach out! As your local bookkeeping professional, I’m here to help simplify the process and keep your books compliant.